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Notice of Repossession Letter: How To, Templates & Examples

Writing a repossession letter

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It will not be an exaggeration to say that we live in a materialistic world. We are always surrounded by things and yet, we keep an eye on the latest products that launch every day. We want our houses to be as updated as possible when it comes to objects.

But even when we all do not have the means to buy everything, what makes it possible for us to go out in the market and buy our new favourite car? Or what makes it possible to buy the house of our dreams even when it is out of our financial reach?

Yes, we take loans on a certain amount of interest and quench this thirst. There are various lenders in the market that lend money to people and earn their living out of the interest rate. In accounting, the one who borrows money is called a debtor.

In this article, we will tell you everything you need to know about the repossession letter. From explaining what is a repossession letter to telling you the suitability of such a letter. And from giving you the best tips to providing you with the sample templates of such a letter, this article is the only article you need to read today.

What is a repossession notice?

When a debtor fails to pay the owed money to a lender, the lender has a right to seize the asset that was kept as collateral. Before such a seizure, the lender issues a letter/ notice informing that he is seizing the asset. Such a letter is called a repossession letter.

The letter usually states that the lender has failed to maintain his payments. And as a result, his asset is being seized. This is usually the last step and is irreversible.

Sometimes, the letter of repossession may be sent after the seizure of the asset. Such a letter is called a post-repossession letter.

A post-repossession notice usually confirms that the repossession has taken place. It also offers the debtor a chance to get ownership of the repossessed property. This is usually done by paying off the amount that is in arrears along with the costs associated with the repossession process. If the debtor fails to meet the terms in the post-repossession notice, the lender is free to sell the asset. HE can recover whatever amount is possible from that sale. It can also sue the debtor for the outstanding costs if any.

The article will provide you with the notice of repossession letter template. You can use the tips and samples to frame your own letter of repossession notice.

Is issuing a repossession notice always necessary?

No, it depends on the place and the law prevailing there. Some jurisdictions deny the need to issue any such notice. Usually, during the signing of the lending contract, the clause of seizure is mentioned. This negates the need to issue such notice again later.

The lender can directly go on and seize the asset, staying within the boundaries of the law.

Although, in some jurisdictions, the lender is asked to issue a post-repossession letter.

So, it totally depends on what the law of the land states. In India, there is no need to issue a repossession letter in order to seize the assets.

What is the usual process of repossession of assets?

Typically, lenders attempt to work with debtors before taking such a big step. They usually provide suitable time for debtors to respond or to demonstrate the intent of meeting the debt deadline. If these efforts too fail, the notice is sent and recovery procedures commence.

Let us check through an example. If the debtor pledged a vehicle as collateral on a car loan and fails to make the monthly instalments payments, the lender may declare the loan to be outstanding. At that point, steps to recover the pledged vehicle can be initiated. They can also hire a third party who specialises in the repossession process.

Usually, the process starts with sending reminders to the debtor. They are called the late-payment reminders. They may be sent via email or letter.

If the payment still stays outstanding, a letter is sent to the lender that notifies him that the repossession process will begin soon.

If even after that the payment stays outstanding, the lender goes on to tow the car or auction the property. He then is not answerable to the debtor.

But again, it depends upon the place you are staying in. There are different laws related to repossession at different places. In certain jurisdictions, sending a repossession letter is absolutely unnecessary. The terms of condition in the contract contain the required clauses for the same.

So, you must check the latest rules and regulations before initiating the process.

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Tips to write an effective repossession letter to your client:

Writing such a letter demands a certain understanding. At first, it may seem like a complex process. To make the process of writing such a letter easy, mentioned below are some useful tips. Keep reading to find out various notice of repossession letter template.

  • Choose the medium of sending the letter: It is always better to choose how you are going to send the letter, beforehand. You can choose a physical letter or an email.
  • Keep it professional: Always remember, this letter is not personal. Do not mention personal incidents.
  • Be kind: You never know what the other person may be going through. So, avoid sounding too harsh in the notice/ letter. Write just what needs to be written.
  • Be formal: Always stay formal while writing such a letter. You must keep in mind that there is a formal relationship between the sender and the receiver in this case. Sometimes, being informal can cause more damage in such cases.
  • Mention the items: Always try to mention the items you are auctioning. If you are towing the car, mention the full details and the time of towing. If you are auctioning a house or land, mention the date and the time of the auction.
  • Mention the details about the third party: If you are hiring a third party to seize the assets, it is imperative to mention its details as well. Make sure that you choose a company that is good at its job and not rude to the debtor.
  • Mention the details of the auction: It is imperative that you mention the details of the place and date where the auction is supposed to take place. This ensures that there is no ill intention behind your move.
  • Give an extension, if possible: There may be chances that the debtor is a loyal client. You must try to extend the deadline if that is feasible. The debtor may not be in a good shape. Verify his old records and if it is manageable, try to give an extended deadline.
  • Mention the court order no. in the letter: Some lenders prefer to go to court before initiating the repossession process. If a court has given a decision, mention the case and order number in the notice. It increases the seriousness of the notice.
  • Get the letter delivered personally: In case you are writing a letter, always know that delivering it personally will have a larger impact. Do not send it via some third person. Either deliver by yourself or ask any of your trusted employees to do so.

Samples to help you that can act as notice of repossession letter template:

To help you further, we are providing various notice of repossession letter template. Just fill in the blanks and you are good to go.

Sample 1

XYZ Road, London [Sender’s Address]

[Date]

ABC Street, London [Receiver’s address]

Dear [Debtor’s name],

This is to inform you that we have not received any acknowledgement or any payment from your side related to your debt of [Enter amount]. This letter has been written after numerous attempts of collecting the due amount.

Your amount of [Enter Amount] is currently [Days] days past the deadline. We intend to complete the whole procedure in the next 3 business days. If you pay within the next 3 days, it will stop the repossession process.

If you fail to meet the conditions, we will seize your car. Your car details are attached with the letter.

Regards,

[Your Name]

[Company’s name]

Sample #1 for Notice of Repossession Letter

Sample 2

XYZ Road, London [Sender’s Address]

[Date]

ABC Street, London [Receiver’s address]

Dear [Debtor’s name],

This is to inform you that you are 10 [Enter Days] days past the payment of your loan of [Enter Amount]. Our every attempt at contacting you has been in vain.

In order to receive our payment, we have unfortunately decided to seize your property.

We moved to the court for our remedy. The court has allowed us to go ahead with the repossession process. We will start the process on Monday.

The auction will take place in Town Hall [Place] on Monday at 10 AM.

We wish you a happy life.

Regards,

[Your Name]

[Company’s name]

Sample #2 for Notice of Repossession Letter

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Sample 3

XYZ Road, London [Sender’s Address]

[Date]

ABC Street, London [Receiver’s address]

Dear [Debtor’s name],

We moved to the district court for your non-payment of dues. You are now 15 days past the deadline for the payment of your loan of [Enter Amount].

We have been given permission to seize your assets in lieu of the due amount.

We will be auctioning the following items that you had pledged as the collateral:

1)     Recliner worth [Amount]

2)     TV set worth [Amount]

3)     Air conditioner worth [Amount]

4)     Motorbike worth [Amount]

The auction will take place at [Place] on Monday at 12 PM.

Wishing you all the best.

Regards,

[Your Name]

[Company’s name]

Sample #3 for Notice of Repossession Letter

Sample 4

XYZ Road, London [Sender’s Address]

[Date]

ABC Street, London [Receiver’s address]

Dear [Debtor’s name],

Although we are not obliged to send you this notice, we are sending the repossession notice in good faith.

You have not responded to any of our previous emails and letters. You are 20 days past the extended deadline on the payment of your personal loan of [Amount].

We have tried to accommodate as much as possible but now we are initiating the repossession process.

It was mentioned in the contract that your property will be seized in the call of failure of payment of the loan amount. There was no requirement to issue this letter but we still chose to do so.

But because you have been our honest client for years, we have decided to give you a last offer. If you pay the full amount within the next 3 business days, we will stop the repossession process. Otherwise, we will go ahead and seize your car. The details of the care have been attached with the letter.

Feel free to contact our customer service number.

Regards,

[Your Name]

[Company’s name]

Sample #4 for Notice of Repossession Letter

Sample 5

XYZ Road, London [Sender’s Address]

[Date]

ABC Street, London [Receiver’s address]

Dear [Debtor’s name],

It has come to our knowledge that you have failed to meet the deadline for repayment of the loan you borrowed last year. The outstanding amount along with the interest stands at [Amount].

In order to meet the requirements, we have decided to seize your asset that was listed as the collateral. The house of the dimensions [Enter dimensions] located on the [enter street name] will be auctioned at Town Hall [Enter Location]. The auction will be held on Monday at 12 PM.

We wish you a happy future.

Regards,

[Your Name]

[Company’s name]

Sample #5 for Notice of Repossession Letter
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